Vladimir Nedoseev

Project summary

We are a company OOO "Unisnab" with more than 10 years of history in the market of Moscow and the Moscow region for the wholesale of food products. Now we are planning to expand our activities. We are planning to start a new program: wholesale trade in fruit and vegetable products and products of their processing: fresh vegetables and fruits, dried fruits, nuts, spices and preservation.

We have a number of clients willing to buy vegetables, fruits and other products of this type. We also plan to develop the project in Ukraine and Belarus.

Our specialist has been in Iran for several months to study the Iranian market and developed a strategy for entering the fruit and vegetable market. Compared to the market of neighboring Turkey, the Iranian market is now in a more "primitive" state, which gives certain advantages in working with Iranian agricultural producers:

1. The Iranian supplier market is much less structured compared to the Turkish or European market. In Turkey and Europe, it is almost impossible to work directly with agricultural producers: they are all united in associations and agree on their prices, terms, etc.

2. Prices in Iran are usually lower than Turkish prices, not to mention European ones. By the way, Europe is practically closed for supplies to the Russian market (only a few countries are exceptions).

3. Subjectively, it is more comfortable to work in Iran due to the established personal ties. Although we do not plan to refuse from working with Turkish suppliers.

4. Iran is geographically closer to the equator than Turkey. Some parts of Iran are therefore capable of growing fruits that cannot be found in Turkey, such as dates.

Iran also has a number of disadvantages:

1. Agriculture is mainly focused on the domestic market. Therefore, most manufacturers are not ready to provide goods ready for export. Before shipment, it is necessary to prepare the goods for export: sorting, cooling and packing in containers for long-distance transportation.

2. There are few enterprises organizing the preparation of goods for export, their services are quite expensive.

3. Language barrier. But this problem can be easily solved.

4. Iran under sanctions and cut off from SWIFT. This problem has a solution: a number of banking structures, for example, Mir Business Bank, have organized channels for transferring money between Iran and Russia.

To develop this line of business, we need investments for organizing processes

• Purchases of goods in Iran, and subsequently in other countries.

• Organization of preparation of goods for export.

• Export formalities and freight charges.

• Replenishment of working capital for the organization of goods acceptance, import procedures, storage, transportation and promotion.

To organize this program, we are looking for an investor (possibly a partner) willing to invest in this business and / or work in the business as a partner.

Required investments: from 30 thousand dollars (preferably 50 - 100 thousand) - the first stage (only purchases, ordering the preparation of goods with an order for export preparation from third companies). With small investments, we will slower return on investment, since we will have to wait for a refund for the purchase of the next consignments of goods.

The next stage: the creation of our own facilities for the preparation of goods will require from 200 thousand dollars. This will require additional refinement based on the existing experience.

The payback period (first stage) is several months.

The creation of a product preparation site will require a payback period of about 1 - 1.5 years.

Feasibility study.

1. Technological process.

   1. Preparation.

      1. Formalities

      2. Conclusion of agreements in Russia and Iran.

   2. Purchase of goods

      1. Finding a supplier - constantly

      2. Conclusion of an agreement - based on the search and analysis of conditions

      3. Money transfer to Iran - 2-3 days

   3. Preparation of goods for export - 2-5 days.

      1. Collection

      2. Primary processing, including sorting, cooling, packaging, loading

      3. Preparation of documents, product labeling

   4. Export formalities - 1-2 days

   5. Sending cargo, transportation (3-10 days depending on the situation at the borders)

   6. Import formalities in Russia (1-2 days)

   7. Delivery to the buyer, acceptance and transfer of cargo - 1 day.

   8. Buyer's payment (1 business day).

      1. We first plan to work with buyers on payment upon delivery.

      2. The long-term perspective is working with networks. A number of banks in Russia are actively working with factoring instruments. Payment for the main part (about 90% they make during the working day after the submission of acceptance documents.

So, we predict the money back in the range of 11 - 24 days. Let's take an average payment interval of 20 days.

Economy.

The difference between the purchase and sale price is from 3 to 5 thousand dollars for 1 truck with a price from 10 to 20 thousand dollars. We have included in these price parameters the preparation of products for export in Iran and the costs of customs clearance in Iran and Russia. This amounts to an average of 30-40% for each truck.

The cost estimate is about half of this margin (this includes the costs of product quality control in Iran, loading control, and the costs of transshipment and delivery of cargo to a buyer in Russia).

So, the projected profit is 15-20% on a wagon. Those. 20-25% per month.

Those. you can calculate the return on investment in 4-5 months. Taking into account the preparatory stage - 6 months.

Current rates of import customs duties:

http://www.eurasiancommission.org/ru/act/trade/catr/ett/Pages/default.aspx

Examples of price calculation can be found here:

https://docs.google.com/spreadsheets/d/1ectSCyez1a0BiZzORtAj2vvNZciKiI2d_2y-tkYtW5c/edit?usp=sharing

The approximate Cash-Flow chart (the calculation is based on the condition of an initial investment of about 200 thousand dollars, which will make it possible to generate up to 2-3 trucks per week) can be viewed at the link:

https://docs.google.com/spreadsheets/d/1K6qQiTgfWxPABex1cFYrUpSH1np4QL3kP5NalHAr8qg/edit?usp=sharing

Risks.

We see the following risks:

1. The risk of severe delays in deliveries: trucks will go for a long time due to some reason.

   The main route from Iran to the center of Russia: Astara (Iran) - Azerbaijan - Dagestan - Further - to the center of Russia (about 2400 km).

1. Even during the war in Karabakh, the delays were no more than a week.

2. In addition, there are other ways: through Armenia and Georgia. And also - through the Caspian Sea and through Turkmenistan.

3. You can also deal with this risk by working out the supply of less perishable goods.

4. Refusal of the buyer to accept the goods.

   This risk must be dealt with by careful preparation and control of the shipped goods, as well as by competent negotiation of contractual conditions. In addition, you need to work out the insurance distribution channels.

5. Accounts receivable problems.

   You need to carefully check the buyers, in case of doubt, demand a guarantee.

6. Problems with shipments.

   This is the task of the Iranian representative (we have one): check the availability of goods before paying, control the preparation of the goods, check the quantity and quality.